Taxcast: How Accountants Broke Capitalism

Originally published at the

We’ve had leak after leak, whistleblower after whistleblower. But no matter what the scandal is, when it comes to financial secrecy and tax dodging, the so-called big four accountancy firms are key players. We interview investigative journalist and former tax inspector of the on his new book: .

Plus: will President Trump be prosecuted for foundation fraud? And can a leopard change its spots? How come the secrecy jurisdiction of Delaware came out in support of a financial transparency bill?

Featuring: U.S. economist, attorney, and investigative journalist , the Tax Justice Network’s John Christensen and investigative journalist of the Private Eye on his : Bean Counters: the triumph of the accountants and how they broke capitalism. Produced and presented by .

What they are about is maximising their income. They are not about providing objective audits which is really what society needs. Firstly you need much better auditing and then you need serious consequences for poor auditing and the problem at the moment you don’t really have either.”

~ Richard Brooks

Residents and non-residents can still continue to use US shell companies to hide their identity and the US is set to remain in the ranks of the largest and least cooperative secrecy jurisdictions in the world.”

~ John Christensen

 

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Want to subscribe? Subscribe via email by ing the Taxcast producer on naomi [at] taxjustice.net OR subscribe to the Taxcast RSS OR subscribe to our youtube channel, OR find us on Acast, Spotify, or .

Further reading:

The EU’s Chief Brexit negotiator calls on the UK to publish the real owners of trusts, as a key part of its relationship after Brexit, speech .

Italy’s new deputy PM calls for the removal of investigative journalist Roberto Saviano’s police protection, . (In Italian)

Delaware Endorses Bill to Tackle Anonymous Companies, from our friends at the FACT Coalition . And also House Anti-Money Laundering Bill – a Missed Opportunity, .

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16 comments

  1. Sound of the Suburbs

    The giant accounting firms had become corrupted.

    A problem highlighted in a BBC Documentary in 2007.

    The Trap – Part 2 “The Lonely Robot” (46.50 – 49 mins)

    It’s just got to the top of the intray.

  2. Kirk Gothier

    More than a “Warning to Stale Democratic Leaders,” Ocasio-Cortez’s stunning defeat of Congressman Joe Crowley is the political equivalent of an atomic bomb, directed at an entire generation, with one clear message:

    We are changing the world, our way, on a Global Level, with, or without you!

    Millennials around the world are working 24/7, disrupting entrenched cultures with their Sharing Economy, and building prosperity at unprecedented levels.

    As Nicholas Kristof declared, in his NY Times Opinion Piece: “2017 Was the Best Year in Human History!”

    Automation, Robotics, Artificial Intelligence, and Deflation will define our species for the next millennium, whether we like it, or not…

    1. shinola

      “Millennials around the world are working 24/7, disrupting entrenched cultures with their Sharing Economy, and building prosperity at unprecedented levels.”

      Yeah, right.

      Oh, and you left out flying cars and robotic maids and, and sparkle ponies!

    2. Kirk Gothier

      Look forward, don’t blame Auditors for a failed global economic system (credit default swaps, collateralized debt obligations, deregulation, income disparity, etc.), read the emerging technology tea leaves (especially molten salt reactors), and learn to adapt… ASAP!

  3. skk

    re: TaxCast – how the accountants broke capitalism.

    Nice to see the fortnightly satirical magazine Private Eye get a mention. I read it regularly from 1976 to 2008 even after I moved to the US in ’92. Sadly I discontinued my subscription to that mighty organ in 2008 when I I realised I wasn’t even taken it out of its opaque plastic cover for days at a time because I wasn’t getting the allusions, despite the British newspapers being online by then. One really had to “be there” to get it. Like Nathan Jones, I’d been gone too long.

    1. james

      I’m the same, since the early 70’s but have stayed with the Eye a little bit longer, it’s not the rag it was, still worth a read with the back pages but I don’t trust it now, a not Grauniadlike total capitulation but not far off , the likes of Brittan, Heath, and Proctor are now fine upstanding men nothing to see here, and Lord Gnome seems content to share the media line on Putin and mad wheezes like Skripal, very sad in its day a good PE cover could have blown that nonsense.

      1. RBHoughton

        Agreed, not the rag it was, and mainly interesting for the local government whistle-blowing. As SKK says you need to dive into the UK culture to understand some of the allusions, something I can no longer do.

  4. Arthur Dent

    A key difference between professional accounting and other professions like engineering is the way the definitions are written. Definitions of the practice of accounting are written around standards of care and guidelines while professions like engineering have fundamental societal requirements like “safeguarding of life, health and property”. If we want finance and accounting to change significantly, then their professional laws need to be written with an over-arching principle of protecting the public and society. In professions like engineering, the standards of care are only used to help limit liability so that it is commercially possible to provide the service, not as the pinnacle of the profession.

    From NYS professional laws

    Professional Engineering
    “The practice of the profession of engineering is defined as performing professional service such as consultation, investigation, evaluation, planning, design or supervision of construction or operation in connection with any utilities, structures, buildings, machines, equipment, processes, works, or projects wherein the safeguarding of life, health and property is concerned, when such service or work requires the application of engineering principles and data.”

    Public Accountancy (typical definition)
    “any audit to be performed in accordance with generally accepted auditing standards or other similar standards, developed by a federal governmental agency, commission or board or a recognized international or national professional accountancy organization, that are acceptable to the department in accordance with the commissioner’s regulations;”

  5. JEHR

    I listen every month (via iTunes) and I admire the detail that Taxcast provides for all the global financial shenanigans going on in the world. Incredible that corrupt auditors only pay a monetary penalty for all its frauds and corruption. The auditing companies and yet they go on, and on, and on, doing their corrupt opaque work and ruining the lives of ordinary people in so doing. They should be liquidated and re-invented and regulated to the hilt.

    1. Jeremy Grimm

      I think the accounting profession deserves kudos for their part in turning stock investment into a true gamble. Am I wrong in believing the chief impact of the Enron debacle on the accounting profession was the restructuring and renaming of Arthur Anderson LLP to Accenture?

      1. rd

        The chief impact was the subsequent cessation of white collar crime as crime. Instead, it has been turned into the equivalent of speeding tickets, but even weaker because they have also removed the potential of losing your license on points.

  6. Altandmain

    What needs to happen is serious crackdowns on international tax havens.

    The wealthy need to pay more than they otherwise would have. The penalties should be SEVERE or else they will keep doing what they are doing. Jail would also be appropriate.

    Similarly, the big four (KPMG, PWC, Ernst & Young, and Deloitte) accounting firms where they helped should also be held accountable. Law firms and other specialized tax avoidance consulting firms should also be held accountable. In many cases, I think that senior partners have to go to jail.

    The only way this is going to be solved is if the penalty exceeds the crime. It seems to me that the very well off see taxes as beneath them and only for the “little people”, so to speak.

    Although it doesn’t focus on tax law, I recommend the site on key aspects of the big 4 accounting firms.

  7. ewmayer

    PWC (and Deloitte as a secondary crooked auditor) in the news:

    | Wolf Street – When it gets too complicated for senior auditors, send in a “college-aged intern.”

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